Oversubscription in the lump sum - we can't afford not to pay it

History of "overcontracting"

I remember when I started working in the Office of the Government Plenipotentiary for Health Insurance Funds in 1998.At that time, no one knew the concept of "overcontracting." The term was first coined in 2001.We were then at the stage of changing the health care system from the Health Insurance Funds to a system based on the National Health Insurance Fund.

From 2001 to 2003, I won all the "overcontracting" cases, not realizing that my personal successes were a failure of the system.

The courts, above all the Supreme Court, have taken the position that since the basis for the provision of benefits is a contract, which contains the maximum amount of the payer's obligation to the provider, the deliberate performance of medical procedures in excess of the contractual limit cannot result in a successful claim for payment.

The Supreme Court's position on the issue of pursuing claims for over-limit benefits has changed over time. Back in 2003, there was a ruling announcing a change in this regard, in which the court stated that "the provision of Article 7 of the Law on Health Care Institutions imposes an obligation on a health care institution to provide health care services if a person reporting to the health care institution needs immediate health care services due to a threat to life or health, and does not regulate the financial consequences of providing health care services. [...] This means, therefore, that if a public health care facility provides a service in a life- or health-threatening situation, the obligation to bear the cost of the service to a patient entitled under health insurance will be borne by the health insurance fund to which the patient belonged (currently the National Health Fund)." [1]

Oversubscription in the lump sum - the courts on the side of the National Health Service

"Under the amended law, however, the increased amount of services over the contracted lump sum may find coverage by increasing it in the next billing period, without the obligation to return the portion of this lump sum that is not used, and thus a mechanism has been provided to compensate for the previously spent funds, although it is not perfect and fully satisfactory to medical entities. Therefore, one cannot agree with the applicant's argument that, by entering into a contract with it, the National Health Fund, contrary to the principles of social intercourse, imposed on it the obligation to provide an indefinite and unlimited range of health services without public funding." [2]

Promises of a tinkerer

"Nearly PLN 1 billion will flow to hospitals from the National Health Fund for financing services performed over the limit specified in the lump sum, Health Minister Adam Niedzielski announced Monday in Trzcianka (Greater Poland). He added that a total of more than PLN 5 billion will flow to hospitals for the years 2022 and 2023 on account of so-called "overperformance." [3]

This promise is not that of Adam Niedzielski, but that of the Minister of Health

What in fact are "overruns" in the lump sum

"Oversubscription" in the lump sum is nothing more than health care services that are performed by hospitals in excess of the lump sum specified in the contract concluded with the National Health Service.

Adopting a lump-sum form of accounting for the cost of services, implies abandoning the financing of individual cases and procedures in favor of financing within a single amount all the care provided to patients in a given billing period, especially since lump sum amounts can be shifted between departments, as indicated by the monthly payment of remuneration equivalent to 1/3 of the total remuneration.

Thus, remuneration determined in the form of a lump sum assumes that "overexpenditure" do not occur, and if less money was spent than the calculated component of the flat salary per unit, these funds would not be reimbursed.

The reporting of services actually performed did not affect the amount of the lump sum paid, and according to the law was only to be the basis for determining the amount of the lump sum for subsequent billing periods, by increasing or decreasing it.

Under current regulations (Article 136c(3)(2) of the law), hospitals that have not performed 98 percent of the lump sum keep less money in the following year.

In this context, a rather important question must be asked "What sense does it make to pay 100% of the lump sum to hospitals that perform less than 98% of the lump sum, while failing to pay hospitals that, during the same period, performed health services covering 102% of the lump sum."

We equate to the worst

In 2022. 169 hospital entities out of 585 qualified for the system of basic hospital health care services did not realize the lump sum at the level of 98% In the Opole province, the lump sum was realized at the level of 96.8%, and in the Warmian-Masurian province at the level of 98.4%. At the same time, in the Warmian-Masurian province as many as 28% of hospitals realized less than 90% of the value of the lump sum.

However, the National Health Service and the Health Ministry decided to give hospitals a chance by not reducing their lump sum in 2023 and allowing them to accrue performance.

I don't know the data for 2023, but I'm curious to see what's next - how many hospitals have made up for the default and what the settlement with them will look like next.

Personally, I am of the opinion that we, as a society and a country, cannot afford to have our health premiums go to hospitals that cannot handle the performance of services. I much prefer that my premiums go to hospitals that have "overcapacity."

Why? Because it means that these hospitals, despite the difficulties, are properly managed since they are able to admit more patients compared to others, and thus eliminate waiting queues.

Another postponement of the settlement of hospitals that do not perform even 98% of the services in the hospital lump sum is nothing but a waste of the public penny. Yes a waste. Just like paying hospitals 100% of the lump sum while they perform "only" 98% of the services in the lump sum.

We are desperately trying to achieve health care outlays of 7% of GDP (now after the New Deal changes, mainly through the efforts of businesses, whose premiums have increased by about 80%), while on the other hand we are giving away the public penny with a light hand.

The results of the NIK audit

The results of Inspection P/22/048 "Functioning of county hospitals", which was undertaken on the Supreme Audit Institution's own initiative, are very interesting[4].

According to the results of the audit, as of June 30, 2022, there were 313 district hospitals that provided health care services financed by the National Health Fund. Of these, 297 showed liabilities.

According to NIK data, the number of district hospitals located across the country varies widely, ranging from eight in Lubuskie Province to 44 in Mazowieckie Province.

As the NIK points out, although the financial performance of county hospitals improved in the 2018-2021 period, the year 2021 closed with a net loss for nearly half of county hospitals. Better financial results were recorded by hospitals run as independent public health care institutions. Nearly 60% of county hospitals at the end of 2021 had liabilities due, of which 36% had liabilities above PLN 1 million. In 2018-2022 (H1), 30% of hospitals had a unit construction project with a cost estimate of more than PLN 10 million. In addition, a shortage of doctors was indicated by nearly 80% of hospitals.

However, according to the NIK audit cited at the outset, moreover, the shortage of doctors was cited by nearly 80% of hospitals, while the NIK audit showed that notoriously hospitals do not comply with staffing standards.

At the same time, according to the NIK, the total number of beds available to the audited hospitals increased slightly during the audit period (from 5918 in 2019 to 5996 - at the end of the first half of 2022). At the same time, there was a decrease from 2020 in the total number of inpatients (by 37.5%) and the total number of outpatients (by 23.5%) compared to 2019, which the NIK explained with the COVID-19 epidemic state introduced in the country, declared in March 2020. On the other hand, the share of medical workers in the total workforce slightly but successively decreased, and amounted to: in 2019. - 68.4%, in 2020. - 67.6%, in 2021. - 66.8%, and 66.0% at the end of the first half of 2022.

Even if the decrease in the number of patients was caused by the COVID-19 outbreak shutdown, it is puzzling to see the increase in the number of hospital beds, with a shortage of medical staff, and a decrease in hospitalizations.

What will happen?

I have no idea. I don't have a crystal ball but I know that:

- we can't continue to throw money down the drain on unprofitable and indebted hospitals because their numbers are too high anyway, and this causes them to pay horrendous hourly rates for doctors (even more than PLN 1,000 per hour) just to keep the staff necessary to maintain the contract with the National Health Fund (not even to perform the contract, but just to maintain it);

- we do not carry out the Transformation Plans (who still remembers them-perhaps only the European Union, which obliged us to implement them), that is, the transformation of hospital beds into long-term ones, and we have the fewest of these beds in the European Union

- We are not and will not reach the 7% of GDP ceiling for health care spending with such a waste of public funds;

- all the time we are "polishing" those who are in debt and unable to manage at the expense of the leaders (this can also be seen in the state emergency medical services system, where we pay for specialized ambulances with doctors, weaning ourselves from imposing penalties on those who do not have these doctors - which is almost everyone.

What's next for the "excesses" in the hospital lump sum. It's only a matter of time when some hospital will hit a panel of judges that will grant it. This already happened in 2003, and then "a Pole will be wise after the loss, as usual." You will have to pay these "overcharges" + court costs, which will not be small ... and taxpayers, the public and the State cannot afford it. Just as you can't afford to keep rewarding weak, poorly managed hospitals at the expense of the best ones.

Why do I think so? You don't have to be a great philosopher to recall the Constitutional Court's most famous ruling[5] on health care: "From the obligation of public authorities to actually ensure the conditions for the realization of the right to health care, which cannot be treated as an illusory or purely potential entitlement, however, follows the requirement that the system - as a whole - must be effective.[...]benefits financed by the aforementioned funds are to be available to citizens (and thus no longer to "everyone"), and it is not a matter of mere formal availability, declared by "program" legislation, but of actual availability, constituting the realization of the right to health care specified in paragraph 1 of Article 68 of the Constitution (verba legis: "...public authorities [...] shall provide..."). The wording of the Constitution is categorical and of a guarantee nature [...] The assessment of the organizational structure is therefore closely related to the assessment of the guarantees of the right to health care. The existence of fundamental systemic defects must therefore be considered at the same time as a violation of the guarantees of the right to health protection set forth in Article 68(2) of the Constitution. It is therefore necessary to evaluate the organizational model adopted in the law itself on this plane. The basic constitutional benchmark for such an assessment is Article 2 of the Constitution."

Nothing to add nothing to that ... it doesn't even fall out.

[1] Judgment of the Supreme Court of November 5, 2003, ref. IV CK 189/02.

[2] Judgment of the Court of Appeals in Katowice of December 4, 2019, Ref. file I ACa 323/19

[3] https://cowzdrowiu.pl/aktualnosci/post/niedzielski-1-mld-zl-dla-szpitali-na-nadwykonania-w-ryczalcie

[4] https://www.nik.gov.pl/plik/id,28082,vp,30905.pdf

[5] https://isap.sejm.gov.pl/isap.nsf/download.xsp/WDU20040050037/T/D20040037TK.pdf